Bad credit mortgages

Looking for a mortgage, but worried bad credit is standing in your way?

We are here to help.

Embarking on the journey of applying for a mortgage with bad credit might seem like uncharted territory, but rest assured, it’s not as impossible as it may appear. While the process shares similarities with any other mortgage application, the key difference lies in the challenge of finding lenders willing to extend a helping hand to those with less-than-perfect credit histories, given the associated risks.

At Mortgage Decisions, we firmly believe that a blemished credit history shouldn’t shatter your dreams of owning a home. The notion that bad credit is an insurmountable hurdle is far from accurate. In fact, bad credit mortgages are designed precisely to bridge the gap between aspiring homeowners and the keys to their dream properties.

In the realm of modern lending, an increasing number of lenders are adopting a more personalised approach. They look beyond the cold numbers of a credit score and delve into affordability assessments and manual applications.

This approach seeks to discern the whole picture, potentially allowing for an override of a low credit score. So, even if your credit history is far from perfect, or if you’ve encountered rejection elsewhere, there’s hope on the horizon.

The good news is we can help

And here’s the beacon of good news: We are here to be that hope for you. The belief that past credit challenges can shroud your chances of securing a mortgage for a new home is one we are determined to dispel.

Whether it’s missed payments, County Court Judgements (CCJs), odr even circumstances as complex as an Individual Voluntary Arrangement (IVA), Debt Relief Order (DRO), or Debt Management Plan (DMP), we’re here to extend a hand of support.

At Mortgage Decisions, we see potential where others see obstacles. Our dedicated team is experienced in navigating the intricacies of bad credit mortgages, and we’re committed to turning your homeownership aspirations into a tangible reality.

Don’t let past credit hiccups hold you back – your journey to homeownership begins here.

Call us now on 03454 500200, alternatively, click here and complete this short form about yourself. We’ll be in touch very shortly. With business partners nationwide, you are never too far from financial advice.

What Is a bad credit mortgage?

A bad credit mortgage, also known as an adverse credit mortgage, is a type of mortgage designed for individuals with less-than-ideal credit histories. These mortgages acknowledge that past credit issues, such as missed payments, defaults, or County Court Judgements (CCJs), might have affected your credit score. Bad credit mortgages are tailored to provide an opportunity for those with poor credit to secure financing for a home purchase.

Can I get a mortgage if I have a poor credit history or no history at all?

Yes, it’s possible to get a mortgage even if you have a poor credit history or no credit history at all. While having a solid credit history can improve your chances of securing a mortgage with favourable terms, there are lenders who specialise in bad credit mortgages.

These lenders assess your application based on a broader view of your financial situation, including your current stability, income, and affordability. However, it’s important to note that the terms of the mortgage might differ from those offered to individuals with better credit scores.

What can impact my credit score?

Several factors can impact your credit score in the UK:

  1. Payment history: Consistently making payments on time positively affects your credit score, while missed or late payments can have a negative impact.
  2. Credit utilisation: Using a high percentage of your available credit limit can lower your credit score. Keeping your credit utilisation below 30% is important for a healthy credit score.
  3. Credit history length: The length of your credit history matters. This includes how long your bank accounts have been active. A longer credit history can be seen as more stable.
  4. Types of credit: A mix of different types of credit, such as credit and debit cards and loans, can have a positive influence.
  5. New credit applications: Frequent credit applications in a short period might indicate financial instability and negatively affect your score.
  6. Public records: Events like County Court Judgements (CCJs), bankruptcy, or Individual Voluntary Arrangements (IVAs) can significantly impact your credit score.
  7. Credit balances: High credit balances relative to your credit limits can lower your score.
  8. Address history: Frequent changes in your address can impact your credit score, as stability is considered a positive factor.

To maintain a healthy credit score, it’s important to manage your finances responsibly, pay bills on time, and regularly review your credit report for any inaccuracies.

How is credit score calculated?

Your credit score gets calculated through a points system, relying on the contents of your credit report.

What factors car harm my credit score?

  • A history of missed or late payments.
  • Going over your credit limit.
  • Holding joint accounts with someone with a poor credit history.
  • Applying for credit too often, in a short space of time.
  • Frequently withdrawing cash using your credit card.
  • Bankruptcy, home repossession or Count Court Judgements (CCJs)
  • Not being on the electoral register.
  • Inaccurate/out of date information on your credit report.

How can I get a mortgage with bad credit?

Getting a mortgage with bad credit involves several steps:

  • Assess your finances: Begin by understanding your current financial situation. Evaluate your income, expenses, and any outstanding debts.
  • Check your credit report: Obtain a copy of your credit report from companies like Experian to identify any inaccuracies and assess your credit score. This will also help you understand the factors contributing to your bad credit.
  • Improve your credit score: If possible, take steps to improve your credit score. This could include making timely payments, reducing outstanding debts, making sure you are on electoral register, and addressing any errors on your credit report.
  • Research lenders: Look for lenders who specialise in bad credit mortgages. They have experience working with individuals with less-than-perfect credit histories.
  • Demonstrate affordability: Highlight your ability to afford mortgage payments by showcasing a stable income and employment history.
  • Prepare documentation: Gather the necessary documents, such as proof of income, employment history, and details of your financial commitments.
  • Seek professional advice: Consider consulting a mortgage broker (Mortgage Decisions) or financial advisor who specialises in bad credit mortgages. They can help you navigate the process and identify suitable lenders.
  • Apply and negotiate: Apply for the mortgage with selected lenders. Be prepared to discuss your credit history and provide explanations for any credit issues. Negotiate terms that work for your situation.
  • Compare offers: Evaluate mortgage offers based on interest rates, fees, and repayment terms. Choose the one that aligns with your financial goals.

Advantages of bad credit mortgages:

  1. Access to homeownership: The primary advantage is that bad credit mortgages provide an opportunity for individuals with poor credit to become homeowners when traditional mortgages might not be accessible.
  2. Credit improvement: Regular mortgage payments can contribute to improving your credit score over time, helping you establish a positive credit history.
  3. Diverse options: Lenders offering bad credit mortgages may provide a variety of options, allowing you to choose a mortgage that suits your financial circumstances.
  4. Property investment: Bad credit mortgages enable you to invest in property and potentially benefit from its appreciation.
  5. Personal achievement: Achieving homeownership despite past credit challenges can boost your confidence and financial well-being.

Disadvantages of bad credit mortgages:

  1. Higher interest rates: Bad credit mortgages often come with higher interest rates compared to traditional mortgages. This can lead to increased long-term costs.
  2. Limited lenders: The pool of lenders offering bad credit mortgages is smaller, which can limit your options and potentially result in less favourable terms.
  3. Larger deposit: Lenders might require a larger deposit to mitigate the risk of lending to individuals with bad credit. This can be a financial challenge.
  4. Fees and charges: Bad credit mortgages might involve additional fees and charges, such as higher arrangement fees and valuation costs.
  5. Stricter criteria: Lenders might impose stricter criteria for approval, including more comprehensive affordability assessments and detailed documentation.
  6. Less flexibility: Bad credit mortgages might come with less flexible terms, such as restrictions on overpayments or early repayments.
Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

Speak to our experts

With access to 1000s mortgages from over 90 high street lenders, we can help you find the right mortgage. Our five-star Google reviews back this up. Call us now and speak to a member of our experienced team.

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Frequently asked questions

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